I'm looking for small, great sounding speakers that have at least a 5" woofer but are no taller than 12". I have not heard either since no one carries the Atoms in my area and I don't know anyone who owns Axioms.

I am familiar with the Paradigm sound and quite enjoyed it. From what I have read, the M2i's are a bit more forward which I don't mind at all. Both get ridiculously good reviews.
I do listen to alot of multichannel music. I will be running a them with a sub; a JBL PB-10.

I just want the forum's opinion as to which would be the best overall speakers in terms of accuracy, full midrange, and clarity. Also, becouse of my setup, I need speakers that are somewhat forgiving in terms of placement with a larger sweet spot. I will likely ceiling mount the mains.

I will be running them via a Yamaha 1500 and I'm upgrading from a Energy take 5.2 setup.

Quick answer -- M2s are more accurate, Atoms sound better without a sub. I own both... the main thing is that I was pretty happy with the Atoms as standalone speakers but the M2s were just a bit too thin in the bass for about half of the music I listened to...

With a sub, it's a different story. The M2s are extraordinarily good with a sub, and the only reason for getting bigger speakers at all is that they won't give you that "wall of sound" SPL without serious dynamic compression.

The Atoms will play quite a bit more loudly than M2s and sound pretty darned good -- the main downside with them is what seems like a big response peak in the 150hz range... probably a side effect of the tuning that gives them decent bass and lets them play loud.

My Atoms are going to go into a mini-HT setup for my parents; I'm keeping the M2s, if that helps. Here's an old thread with my comments on a cold Toronto night just after I bought the Atoms :

EDIT -- it's a shame your height budget can't stretch to 13.5"... I think M3s give you the best of both worlds... very nearly as accurate as the M2s, able to play loud like the Atoms, but without as much of the resonant mid-bass peak.

I'm guessing your dog is bigger than mine. Real dogs are pathetically grateful for even the dryest most boring treat... little dogs will ptooie out most food unless the fat content is high... one of the dogs will only eat fries if they are dipped in mayonnaise. No, I don't want to explain how we learned that...

Actually, I could go for the M3s since I'll probably ceiling mount the mains so I can angle them down. As you can see I'm screwed in terms of placement options.But I figured that because of the M2s are more forward sounding than the M3 they would work better in my room. No??

Actually I used the M2 as center because I already had M2s, didn't know squat about multichannel sound, wanted to see how much difference a center channel made, and didn't want to spend any money until I knew more. This pic was taken during a series of experiments with one and two center channels in different arrangements around the TV and was only posted here for the dogs. At the time I normally ran the M2 inverted and vertical on top of the TV where it made a very good center channel; two M2s both inverted and side by side offered more detail (yes I tried to match the volume levels) but there was something I didn't like about the configuration; never figured out what I didn't like hope it wasn't just the appearance

This was the configuration I used the most, along with old no-name towers as surrounds :

I eventually went to a VP100 center anyways; partly for the video shielding and partly because the M2s looked kinda stupid on the top of my TV (the center channel was almost half the hight of the TV). Also went with QS8 surrounds and moved the M2s back upstairs for a bedroom system (now replaced with M40s).

For a music system I would probably have stayed with the M2 (ditto for surrounds), but movies put a lot of content through the center channel so you need a fairly hefty speaker there. In hindsight I probably should have gone with VP150 -- the VP100 works fine but when I look at the energy going through each speaker the VP100 seems like it should hit its limits first.

I do prefer M2s as surrounds vs. QS8s for pure music, although (a) I haven't done proper A/B testing to confirm, (b) the difference is fairly small, (c) I think the difference is direct vs. reflecting not frequency response but again not sure.

It's probably worth pointing out that the M2's LF response is not stellar, so on one hand I have a tough time believing that there would be much difference in sound from the VP100... on the other hand there is a slight but noticeable difference in how the pink noise test tones sound between the mains and the VP100 center, presumably because of the higher bass cutoff of the VP100 relative to the M60s... next time I am really bored I will put the M2s in as mains and see what that changes. I don't think the test tones go through the crossovers so the M60 vs. VP100 difference would be exaggerated; guess I should use the Avia disk instead of the receiver tones for a better comparison.